September 5, 2013 / 9:52 PM / 4 years ago

UPDATE 1-Argentina province to auction rights to Vaca Muerta shale

BUENOS AIRES, Sept 5 (Reuters) - A province in Argentina will auction the international rights to explore part of the Vaca Muerta shale oil and gas formation, considered one of the largest in the Western Hemisphere, a regional official said on Thursday.

Neuquen province, home to most of Vaca Muerta, will auction a 500 square kilometer swath of the formation, after companies that won concession rights there in 2008 failed to follow through with investments, Guillermo Coco, energy minister for the region of Patagonia said.

“The idea is to hold the auction in March or April,” he said in a telephone interview. “We are going to test the market to see how interested companies are, at least in exploration.”

The massive deposit of unconventional resources has been in the international spotlight since its potential was discovered, but some global companies are uneasy about making big investments in Argentina because of interventionist economic policies.

The administration of President Cristina Fernandez seized the energy company YPF from Repsol last year, claiming the Spanish company had not invested enough in Argentina.

YPF operates in 3 million net acres of Vaca Muerta and has estimated that the entire formation contains 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas.

In July, U.S. oil company Chevron Corp signed an agreement with YPF to invest $1.24 billion in Vaca Muerta, the first major investment announced in Argentina’s petroleum sector since the YPF’s nationalization.

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